Australian dollar (AUD) outlook: What is the key level that could see AUD/USD back at parity?

A look at the forex markets at 10:30 shows:

The pound sterling to Australian dollar exchange rate is 0.16 pct higher at 1.6821.
The Australian dollar to US dollar exchange rate is 0.08 pct lower at 0.9619.

Keep in Mind: The above are inter-bank quotations. Your bank will levy a spread when passing a retail rate; hence why you never get close to the market rate. An independent FX provider will however guarantee to undercut your bank's offer, delivering up to 5% more currency. Find out more here.

Inflation data ensures Aus dollar downside is protected

We saw some large flows and excessive volatility over the last 24 hours.

"Higher-than-expected domestic inflation data saw the AUD/USD take out technical resistance at .9715 before stalling at its 200-DMA near .9750," says Sean Lee at FXWW commenting on the headline AUD/USD rate.

Outlook for Aus dollar: Parity ahead?

Lee is predicting that a breach of a key level could see the Aus dollar achieve parity against the US dollar once more:

"The 200-DMA near .9750 is emerging as the key technical level (see chart) and a clean break above there will usher in a swift test of parity. Support levels should be quite strong now near .9525 where a trend-line converges on previous highs."

Elsewhere, RBA Deputy Governor Lowe stated that further AUD depreciation would help recovery, yet dovish comments were offset by the upside momentum.

"Decent bids supported the pair above 0.9600. Given the upside surprise in inflation, the fading bets on further RBA cut should keep the buying interest tight," says Swissquote Research analyst Ipek Ozkardeskaya.